Tuesday, February 24, 2015

Sales is what you buy. Demand is what you want. Growth comes from bringing the two together.

Interesting article as always of the Harvard Business Review. 
It reminds me of my customer decision making process, which I highly appreciated, and that gave me the love of customer relationship management. 
The article highlights two main ideas.

The difference between demand and sales
Of course, while working on category management plan or to forecast the outcomes of a new project, you need to set up some goals, backed up by data. Most of the time, you extrapolate data from sales figures. But as the article underline, sales data are slim to have the big picture. It does not take into account the impact  out of stocks, suboptimal assortment, pricing inefficiencies, difficult POS experiences, misaligned brands, and redundant innovation. The whole environment have an impact on sales.
Sales data provide you with figures that are difficult to take clearly due to all the factors that may alter one customer decision.

On the other hand demand data is also difficult to reach as we touch to the whole complexity of human emotions and complex decision making process. You need to have tools like brand mapping, that are difficult to transfert into figures. It is like working with your left and then your right brain. Easier said than done.

You need both information though to make the right answer. Same thing with the Direct Profit by Products analyze which can't be the single way to pick a product range, you need to understand all the strategical aspect of your demand, in order to make the right choice to suit your customers.

Working together with the different stakeholders
The second part of the article that I like is about integrating all marketing data. Indeed, there are three main actors that own a part of the information needed:
- Suppliers own customer data
- Retailers own shopper data
- Media own watchers data

It is the essence of category management: suppliers and retailers working together to leverage all these data in order to have the best respond to the demand. As the amount of data available is growing and becoming more precise, there is a lot of potential to unfold.